Chairman's Statement

Extracted from Annual Report 2025

On behalf of the Board of Directors ("Board"), I am pleased to present the Annual Report of Sunpower Group Ltd. for the financial year ended 31 December 2025 ("FY2025").

In 2025, a challenging global economic environment marked by slower growth, trade frictions and policy uncertainty continued to shape China's industrial landscape. While industries faced pressure from weak consumption, cautious investment and the ongoing adjustment in the property sector, structural factors such as rising cost discipline, supply-chain realignment and demographic shifts accelerated industry consolidation and differentiation, favouring companies with strong technology, scale and operational efficiency.

Against this backdrop, demand for essential utilities within industrial parks remained comparatively resilient, supported by the steady growth of the demand from the basic consumer goods in China¹ which GI projects mainly cater to and the critical nature of energy, steam, and environmental services to manufacturing operations. Sunpower is well positioned to benefit from consolidation trends and the shift towards more efficient and sustainable park-level infrastructure.

Despite the challenging macroeconomic environment, the Group remained focused on strengthening and optimising its GI business. As at the end of FY2025, the Group operated a portfolio of 11 GI projects, which continued to form a solid foundation of long-term, recurring income and cash flow generation.

During FY2025, the Group advanced its growth strategy by deepening collaboration with leading state-owned partners, most notably through a strategic collaboration agreement with Jining Energy Development Group and the acquisition of a 15% stake in Jining Xinneng Thermal Power, the exclusive steam supplier to a national key chemical industrial park in Shandong. These initiatives strengthened the Group's GI portfolio, enhanced long-term earnings visibility, and created a platform for future cooperation in clean, integrated and AI-empowered energy solutions in support of China's "Dual Carbon" objectives.

In parallel, the Group increased its ownership in Suyuan Project to 100%, improving investment returns and operational flexibility and increased its equity interest in Xintai Project to 96.1561% through acquisition in FY2025. As for Lianshui Project, it entered agreements with the local government and China Energy that preserve its exclusive concession rights, provide for asset compensation, and ensure a stable steam supply arrangement.

The Group also continued to enhance operational efficiency through capacity optimisation, technological upgrades and refined management practices across its project portfolio.

During FY2025, the Group successfully completed the redemption of the convertible bonds in aggregate principal amount of US$130 million using internal resources and a rights issue of S$99.46 million 7.00% convertible bonds maturing in April 2030 ("CBs"). This refinancing exercise materially strengthened the Group's capital structure by extending its debt maturity profile, reducing near-term refinancing risk and enhancing funding visibility.

With a more stable and longer-dated capital base in place, the Group is better positioned to focus on operational execution, accelerate the adoption of AI to enhance efficiency, and pursue sustainable long-term growth while maintaining disciplined capital management.

FY2025 was a year of operational resilience and strengthened profitability for the Group's core GI business. Total steam sales volume increased 5.8% year-on-year (YoY) to 12.13 million tons, reflecting steady demand from customers across key industrial parks.

GI recurring revenue was RMB3,242.3 million in FY2025. GI recurring EBITDA increased 19.3% YoY (including the one-off bad debt provision recorded in 3Q2024), or 5.9% excluding the provision, to RMB1,124.7 million. In addition, GI recurring PATMI rose 45.4% YoY to RMB424.7 million (including the prior-year provision), or 14.1% YoY excluding the provision, supported by improved project-level profitability and lower finance costs arising from debt optimisation and reduced interest rates.

GI recurring operating cash flow strengthened by 26.3% YoY to RMB856.8 million, reflecting strong underlying cash generation, improved inventory management and enhanced receivables collection.

At the Group level, net profit attributable to equity holders rose 162.0% YoY to RMB312.9 million. Excluding the financial effects of the CBs, net profit attributable to equity holders increased 45.0% YoY to RMB360.9 million.

Overall, the Group delivered robust results in FY2025 despite the challenging environment, underscoring the resilience of our business model and the quality of its asset base.

China continues to pursue high-quality development, placing strong emphasis on the cultivation of "New Quality Productivity" (新质生产力). This national strategy prioritises technological innovation, digitalisation, artificial intelligence ("AI") and green transformation as key drivers of sustainable economic growth. These policy directions are closely aligned with the Group's long-term strategy.

In line with this policy direction, the Group accelerated the adoption of AI technologies across its GI projects during FY2025. These initiatives are designed to:

• improve operational and energy efficiency;
• reduce energy losses and emissions;
• enhance asset reliability and safety; and
• strengthen data-driven decision-making and management.

The Board believes that AI adoption is a key enabler not only for cost optimisation, but also for improving operational excellence, capital efficiency and the Group's long-term competitiveness.

Looking ahead, while the global situation is expected to remain mixed, the Group will remain focused on executing its growth strategy, strengthening the fundamentals and scale-up of its GI business, enhancing resilience, and unlocking long-term value through technology adoption, AI-driven efficiency improvements and disciplined capital management.

On behalf of the Board, I would like to thank our shareholders, customers, employees and business partners for their continued trust and support.

Guo Hong Xin
Founder, Chairman